Staff Report #7
November 29, 2023
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – October 31, 2023
Recommendation
That the report be NOTED and FILED.
Background
Set out in the table below is the Statement of Operations for Conventional Transit Services for the ten-month period ending October 31, 2023. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Ten Months Ending October 31, 2023 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 28,112.0 | $ 28,040.3 | $ 71.7 | 0.3 % | |
| Operating | 2,869.4 | 1,976.5 | 892.9 | 45.2 % | |
| Transfers from reserves | 6,798.9 | 7,108.6 | (309.7) | (4.4)% | |
| Province-provincial gas tax | 7,393.3 | 7,393.3 | – | 0.0 % | |
| City of London | 29,044.2 | 29,044.2 | – | 0.0 % | |
| Total revenue | 74,217.8 | 73,562.9 | 654.9 | 0.9 % | |
| Expenditure | |||||
| Personnel cost | 48,079.3 | 48,383.8 | 304.5 | 0.6 % | |
| Direct bus maintenance | 6,966.8 | 6,207.8 | (759.0) | (12.2)% | |
| Fuel | 8,085.4 | 8,698.7 | 613.3 | 7.0 % | |
| Facility costs | 2,852.2 | 3,005.4 | 153.2 | 5.1 % | |
| Insurance | 3,696.4 | 3,919.4 | 223.0 | 5.7 % | |
| Contribution to reserves | 1,513.7 | 777.5 | (736.2) | (94.7)% | |
| All other material expense | 2,631.1 | 2,570.3 | (60.8) | (2.4)% | |
| Total expenditure | 73,825.0 | 73,562.9 | (262.1) | (0.4)% | |
| Net favourable/(unfavourable) | $ 392.8 | $ – | $ 392.8 | 0.5 % | |
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 0.5% or $392,800. An explanation of the variances is set out below.
Revenue
- favourable operating revenues of $892,900 due to the continued climb in interest rates, resulting in higher than budgeted interest income. Note, this increase is partially offset below as contributions to reserves attributable to the interest income earned within reserve funds; and
- unfavourable transfers from reserves as the required contribution to cover insurance claims is less than budgeted, noting this decrease is offset below as a favourable insurance cost.
Expenditures
- favourable personnel costs of $304,500 due primarily to the timing of filling vacant positions;
- unfavourable direct bus maintenance expenditures of $759,000 due mainly to the increasing cost pressures on parts as well as outsourced repairs required to maintain MTO inspections during labour shortfalls;
- favourable fuel costs of $613,300 due mainly to lower than budgeted diesel fuel prices; and
- unfavourable contributions to reserves of $736,200 due to the increase in interest income earned on reserves, noted above in operating revenue.
Ridership
The table below sets out actual to budget ridership performance as well as a comparison to the same period in the previous year.
Ridership Performance – Actual vs. Budget Ten Months Ending October 31, 2023 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2022 Actual | % Variance |
| Total Passengers (000’s) | 15,066.5 | 14,493.9 | 572.6 | 4.0 % | 10,561.8 | 42.7 % |
| Average Fare | $ 1.866 | $ 1.935 | $ (0.069) | (3.6)% | $ 2.220 | (16.0)% |
| Revenue Service Hours | 565.0 | 569.1 | 4.1 | 0.7 % | 509.8 | 10.8 % |
| Rides/Rev Service Hour | 26.7 | 25.5 | 1.2 | 4.7 % | 20.7 | 28.7 % |
Administration will continue to monitor the operating budget performance, including ridership, on a monthly basis.
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager